House delays vote on tax measure

Bill could derail breaks on solar, other incentives

WASHINGTON - The US House put off until at least today a vote on a tax measure that is different from a Senate-passed bill and could jeopardize enactment of solar energy tax breaks and other expiring incentives.

The White House Office of Management and Budget issued a statement warning of a veto by President Bush because the House measure raises taxes and separates an alternative minimum tax proposal in the Senate package from the main bill.

The vote was put off when a clerical error in the text of rules governing debate halted consideration. "The administration is disappointed that the House has decoupled this legislation from AMT relief and insisted on raising taxes on certain classes of Americans," according to the statement. "By doing so, the House invites certain delay of this important piece of legislation being signed into law."

Congress is racing a self-imposed deadline to complete its work for the year. For the bill to become law, the House and Senate must pass identical versions and avoid a presidential veto.

The White House earlier this week said the president would accept the Senate package. House Ways and Means chairman Charles Rangel, a New York Democrat, said Wednesday in an interview the energy portion of the bill, which the House has set at $15 billion, has been largely cleared.

House and Senate lawmakers were negotiating more than $42 billion in other extenders such as a tax credit for research and development, he said. The Senate bill pays for half of the nonenergy costs, and House leaders want the measure offset.

Senate majority leader Harry Reid, a Nevada Democrat, said Sept. 23 when the Senate measure passed that any House changes would "snatch defeat from the jaws of victory." The House bill retains incentives for renewable energy investments with some alterations.

"The Senate said they wanted two years, this bill gives them two years, paid for by offsets they have already blessed," Rangel said in a statement yesterday. "We can wrap this up today if they don't insist it's their way or the highway. They should not miss this opportunity to pass this bill so we can make law."

Changes to the Senate measure, including eliminating a $1.1 billion tax break for carbon capture and a nine-month increase to a tax credit for geothermal and biomass sources, would have to be approved in a Senate vote. The House bill also appears to leave out a tax credit for rebuilding refineries so they can process heavy oil, such as that produced in Canada's tar sands region. The bill retains an eight-year tax extension for solar energy, tax breaks for energy efficiency, and incentives for plug-in hybrids, but alters their values. The new House bill doubles to two years the renewal of tax breaks for businesses and individuals, matching the Senate measure.

A third anchor would spare 24 million American households from $61 billion in additional taxes this year because of the alternative minimum tax. This so-called patch provision expires annually and would affect millions more families every year because the levy was never indexed for inflation.

For individuals, the measures also renew a $250 deduction for teachers who buy their own classroom supplies, a deduction for state and local sales taxes people can take if they exceed their state income tax, which primarily benefits residents of states where there is no income tax such as Texas, Florida, Wyoming, and Washington.